Resolved Question

LTD director of company question URGENT?

Hi

I am getting really stressed out and need some advice. I am director of a limited company and i own 50% shares. I want to leave the company for personal reasons but Just need some advice. My business partner has the wrong attitude and i just know that when he has bought me out he will run the company into the ground. He is wanting to take out a large loan and expand the company too quickly. All i wan to know is if he does this when i have left the company and sold all my shares will his bad debt effect me in any way. If the business ends up going bust will this effect my credit rating even though i am no longer part of it. Any help on this would be great.

Best Answer - Chosen by Asker

Only when he has bought you out and decides to run the company into the ground, it becomes 'his' problem, prior to that, any liabilities the company has is 'both' your responsibilities.

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Other Answers (3)

• I would make sure that you have a purchase and sale agreement that you both sign stating the price, date and conditions of the purchase by your partner. One of the things you should have in it is a provision stating he assumes all liability for debts occurring after date of purchase. Also make sure that your name is off all accounts where you personally have liability as of the date of purchase. If there are any loans outstanding, you will need to work with the lender to get your name off the loan.
  
  It might be best to talk to an attorney.
  Good Luck
• It is nothing to do with you, if you're out and your name was taken off as a company director and sold your your shares, what your partner does to the company is his own business nothing to do with you, if he run the company to the ground like you said so be it, there is no responsibility what so over on you as long you're gone.
• Make sure all documentation - Companies House/VAT/HMRC etc shows you no longer have an interest in the company - each website will show you how. Ensure you are removed from any Company Bank accounts. If remaining Director then scuppers the company you have no liability, lot of new but good trading companies make the same mistake, once set up a company needs at least 3 years to settle before even thinking about expansion. Good luck